Friday, April 21, 2006

Tonight on the Another Rovian Conspiracy Follow-Up, Bill O'Reilly is still a pinhead. His previous pronouncements that high oil/gasoline prices have nothing to do with supply/demand are proved to be demonstrably false.

My refutation from the other day that much of the increase in gasoline had to do with the annual spring bump in price caused by the switchover to the summer formulations which always causes disruptions in supplies as refineries try to keep up with demand. I also list other factors that O'Reilly refuses to acknowledge, instead perpetuating the myth that oil prices are the result of some conspiracy of "speculators" (should we refer to them as World Bankers, Bill?) bidding up the price of oil...

As if rising prices weren't enough, the tanks have run dry at some Philadelphia-area service stations in the last few days as the refining industry stumbles through a change in the formulation of gasoline.

Oil refiners are phasing out a petrochemical [aka MTBE] that makes gasoline burn cleaner but which also has been found to contaminate groundwater. Refiners are switching to corn-based ethanol [as the additive].

The changeover is creating supply-chain bottlenecks because much work must be done at fuel terminals and service stations to handle ethanol.

The maintenance-related shutdown of one area refinery, production problems at another, and the change from winter-blend to summer-blend gasoline are exacerbating the problems.

"There is truly a dearth of supply in the Philly and New York markets today," Wayne Hummel, of Liberty Petroleum L.L.C., said yesterday. His firm supplies 40 stations in the Philadelphia region.

Hummel said four Liberty stations had run out of fuel the last two days, as tanker trucks drove from terminal to terminal, unable to find fuel. "It's ugly. It's very ugly," he said.

AAA Mid-Atlantic warned drivers yesterday that gasoline-supply disruptions could continue for the next few weeks and contribute to higher pump prices.

The group said the average gasoline price in Philadelphia and its Pennsylvania suburbs had climbed 52 cents a gallon - or 22 percent - to $2.85 since the most recent upturn began on March 7. In South Jersey, yesterday's average was $2.71 a gallon, an 18 percent increase from a month ago. A key benchmark price for crude oil on the New York Mercantile Exchange yesterday was $71.95 a barrel, up more than $10 from a month ago.

Catherine Rossi, spokeswoman for AAA, said she knew of eight stations in the region that were out of fuel yesterday.

Areas of Virginia and Texas, also going through the ethanol conversion, have experienced similar supply disruptions, said Jeff Lenard, spokesman for the National Association of Convenience Stores.

Locally, gas retailers said scheduled deliveries had been late - sometimes up to a day or more - causing them to turn customers away.

Lou Stiles' Sunoco service station in Mount Laurel ran out of gas at least four times this month. Yesterday afternoon, he ran out of regular and was waiting for a tanker.[...]